Why Bitcoin Could Decline Another 85% and Still Be the Next Big Thing (or Not)

See how positioning changes in cryptocurrencies and other markets can help as a tool to determine price direction on the IG Client Sentiment page.

Bitcoin still has significant downside risk from here

How is it that Bitcoin could decline another 85% from current levels and still be the next big thing? Because a little company called Amazon once lost 95% of its value in the early-2000s. And look at it today – worth a trillion-dollars. I am by no means making a direct comparison, nor do I think cryptocurrencies are the next big thing. But rather pointing out that even a speculative bubble that eventually panned out in a big way underwent a nasty, nasty set-up before it began a sustainable rise. It’s how these things tend to work. Regardless of whether Bitcoin turns out like Amazon or Tulips it isn’t likely to escape a similar path in the interim.

Since topping back in December Bitcoin has thus far played out similarly to other historical bubbles once the deflation process began. It’s safe to say it isn’t different this time. Looking at the history of these unusual market dislocations there are a few examples we can

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